Senate's Tax Bill Nearly Ready -- Iras May Lose

May 6, 1986|By KNT News Service

WASHINGTON — The Senate Finance Committee moved close to passage of a tax bill Monday that would put 80 percent of the nation's taxpayers in a 15 percent bracket and take 6 million poor off the tax rolls.

The price would be elimination of many deductions, including for state and local sales taxes, contributions to IRAs by people with other private pension plans, and tax shelters for the wealthy.

''We're close,'' said Chairman Bob Packwood of Oregon after a committee meeting. He appeared to have 6 of the 11 votes he needs, with more members moving his way.

Under the plan, there would be two rates for individuals: 15 percent and 27 percent. The corporate tax rate would be lowered to 33 percent from 46 percent.

It would shift $100 billion in tax burden from individuals to corporations, keep the home mortgage deduction and raise the personal exemption to $2,000.

State and local income taxes and real property taxes would remain deductible.

To pay for all this, Packwood's plan would impose a stiff minimum tax on individuals and corporations, tax all capital gains income as earned income, and wipe out such tax shelters as limited partnerships formed by professionals to buy commercial real estate.